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Accept that you don’t have any special knowledge of or ability to influence the company’s future value. Given that, it makes no more sense to have a lot of your
by troydavis 7y ago
Accept that you don’t have any special knowledge of or ability to influence the company’s future value. Given that, it makes no more sense to have a lot of your net worth tied up on this company than to put, say, 50% of your net worth in Google stock or some random smallcap stock.
Diversify, not because the company might or might not be worth more in the future, but because participating in that bet - trying to predict the future without any unique information - is dumb. If you currently had cash instead of this stock, you wouldn’t invest all of it in one smallcap stock… so don’t.
More background on this: https://www.wealthsimple.com/en-us/magazine/data-diversification https://www.wealthsimple.com/en-us/magazine/data-diversifica.... This company is wheat.
Feel free to keep some portion of the stock (perhaps 5% of your current position?), as long as it’s the amount you’d go out and buy with cash if you could. Don’t keep it merely because you currently own it.